Struggling homeowners can get mediation aid

When homeowners are underwater on their mortgage loans and don't know whether they should pack the towels or hang on, help is available from the Dispute Resolution Center in Everett.

The threat of foreclosure is easier to face when a third party, a mediator, brings both sides to the same table to hash out a financial agreement.

For some, they may get to keep their house through a modified loan.

For others, it could be time to rent a moving van.

This way to handle foreclosures got rolling April 14 when Gov. Chris Gregoire signed into law the "Foreclosure Fairness Act." As spelled out in the law, certain homeowners will qualify for mediation. If they are referred to the DRC, Matt Phillips, executive director of Volunteers of America Dispute Resolution Center and chairman of Resolution Washington's legislative committee said, the lender is obliged to participate.

"This program will provide relief to homeowners who've found themselves in need of both direct communication with their lenders, and a plan for how to move forward," he said. "Our center is excited to bring this resource to Snohomish, Island and Skagit counties.''

Mediations will be guided by trained volunteers at the Dispute Resolution Center in Everett.

Talk about extreme volunteers.

Men and women have been trained at the center for a week, have spent more than a year doing mediations on other topics, then attended a three-day training session put on by the state Department of Commerce.

They are meeting in study groups and learning the law to prepare for their cases.

The DRC is a dandy agency. I wrote about them three years ago when they offered mediation services for families arguing about where kids will spend school vacations, Christmas or Hanukkah.

The center is an alternative justice center. It was founded by the Volunteers of America in 1982 as a rental housing mediation service and it offered fair housing counseling services for Snohomish County.

In 1986, it expanded to offer the first DRC in our state.

Mediators guide discussions through a structured process. They handle problems with families, divorces, workplace and neighborhood conflicts, renter and landlord situations and bring sides together about for business, consumer and property disputes.

"A number of states already have home foreclosure mediation programs," Phillips said. "In these types of mediation programs, 70 to 75 percent of cases end in a settlement, with 60 percent of homeowners reaching settlements that keep them in their homes."

For those in mortgage trouble, don't call the Everett center. To participate, call 877-894-HOME, and a housing counselor will work with the homeowner to help them understand their options and determine if they are eligible for mediation.

"Homeowners must be referred to mediation from a housing counselor or an attorney," said Nisha Wade, spokeswoman for the Department of Commerce. "Homeowners can also contact the statewide civil legal aid hotline for legal assistance and referrals at 800-606-4819."

Housing counseling is free. If folks are referred to mediation, the cost to the homeowner is $200. The lender will also pay $200. The big hurdle is getting both sides to gather all the documents pertaining to the situation, said Ryan Mattfeld, Home Foreclosure Mediation program manager. He said no case is on the calendar yet in the new program in Everett, but 40 possibles are percolating.

Why would a bank, who seemingly holds all the cards, want to submit to mediation?

Mattfeld said banks will want to participate because they may have difficulty getting all the documents needed from a homeowner.

"Who better to turn it over to than a mediator?" Mattfeld said. "Put everybody in the same place at the same time."

Those hard working, dutiful mediators will review all the paperwork, from both sides, before the meeting is called.

"The end result will be more families staying in their homes and less housing instability in the community," Phillips said.

Kristi O'Harran: 425-339-3451, oharran@heraldnet.com.

How to get help

For those behind on their mortgage payments who would like a mediator to look at their situation with the lender, call 877-894-HOME. A housing counselor will work with the homeowner to help them understand their options and determine if they are eligible for mediation.

Homeowners can also contact the statewide civil legal aid hotline for legal assistance and referrals at 800-606-4819.